Under the accrual basis of accounting, a company receives $\text{₦}5,000$ in cash on 1 March for services that will be performed evenly over the next six months. How should this receipt be recorded in the books on the date of receipt? State the journal entry (account titles only).

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Accepted Answer

Debit Cash 5,000; Credit Unearned Revenue 5,000

Gce Model Questions Vol1 2025 Financial Accounting Question 28

Under the accrual basis of accounting, a company receives \(\text{₦}5,000\) in cash on 1 March for services that will be performed evenly over the next six months. How should this receipt be recorded in the books on the date of receipt? State the journal entry (account titles only).

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Gce Model Questions Vol1 2025 Financial Accounting Question 28

Under the accrual basis of accounting, a company receives \(\text{₦}5,000\) in cash on 1 March for services that will be performed evenly over the next six months. How should this receipt be recorded in the books on the date of receipt? State the journal entry (account titles only).

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About This Question

Master the Exam!

Under the accrual basis of accounting, a company receives \(\text{₦}5,000\) in cash on 1 March for services that will be performed evenly over the next six months. How should this receipt be recorded in the books on the date of receipt? State the journal entry (account titles only).